H.B. 245

1

REGULATION OF TELECOMMUNICATIONS
2 CARRIERS
3 2003 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Chad E. Bennion
6 This act modifies the Public Utilities title to include certain providers of intrastate
7 telephone service in the definition of telephone corporation to the extent permitted by
8 federal law. This act makes technical changes.
9 This act affects sections of Utah Code Annotated 1953 as follows:
10 AMENDS:
11 54-2-1, as last amended by Chapter 212, Laws of Utah 2001
12 Be it enacted by the Legislature of the state of Utah:
13 Section 1. Section 54-2-1 is amended to read:
14 54-2-1. Definitions.
15 As used in this title:
16 (1) "Avoided costs" means the incremental costs to an electrical corporation of electric
17 energy or capacity or both which, due to the purchase of electric energy or capacity or both
18 from small power production or cogeneration facilities, the electrical corporation would not
19 have to generate itself or purchase from another electrical corporation.
20 (2) "Cogeneration facility":
21 (a) means a facility which produces:
22 (i) electric energy; and
23 (ii) steam or forms of useful energy, including heat, which are used for industrial,
24 commercial, heating, or cooling purposes; and
25 (b) is a qualifying cogeneration facility under federal law.
26 (3) "Commission" means the Public Service Commission of Utah.
27 (4) "Commissioner" means a member of the commission.

28 (5) (a) "Corporation" includes an association, and a joint stock company having any
29 powers or privileges not possessed by individuals or partnerships.
30 (b) "Corporation" does not include towns, cities, counties, conservancy districts,
31 improvement districts, or other governmental units created or organized under any general or
32 special law of this state.
33 (6) "Distribution electrical cooperative" includes an electrical corporation that:
34 (a) is a cooperative;
35 (b) conducts a business that includes the retail distribution of electricity the cooperative
36 purchases or generates for the cooperative's members; and
37 (c) is required to allocate or distribute savings in excess of additions to reserves and
38 surplus on the basis of patronage to the cooperative's:
39 (i) members; or
40 (ii) patrons.
41 (7) "Electrical corporation" includes every corporation, cooperative association, and
42 person, their lessees, trustees, and receivers, owning, controlling, operating, or managing any
43 electric plant, or in any way furnishing electric power for public service or to its consumers or
44 members for domestic, commercial, or industrial use, within this state, except independent
45 energy producers, and except where electricity is generated on or distributed by the producer
46 solely for the producer's own use, or the use of the producer's tenants, or for the use of
47 members of an association of unit owners formed under Title 57, Chapter 8, Condominium
48 Ownership Act, and not for sale to the public generally.
49 (8) "Electric plant" includes all real estate, fixtures, and personal property owned,
50 controlled, operated, or managed in connection with or to facilitate the production, generation,
51 transmission, delivery, or furnishing of electricity for light, heat, or power, and all conduits,
52 ducts, or other devices, materials, apparatus, or property for containing, holding, or carrying
53 conductors used or to be used for the transmission of electricity for light, heat, or power.
54 (9) "Gas corporation" includes every corporation and person, their lessees, trustees, and
55 receivers, owning, controlling, operating, or managing any gas plant for public service within
56 this state or for the selling or furnishing of natural gas to any consumer or consumers within the
57 state for domestic, commercial, or industrial use, except in the situation that:
58 (a) gas is made or produced on, and distributed by the maker or producer through,

59 private property:
60 (i) solely for the maker's or producer's own use or the use of the maker's or producer's
61 tenants; and
62 (ii) not for sale to others;
63 (b) gas is compressed on private property solely for the owner's own use or the use of
64 the owner's employees as a motor vehicle fuel; or
65 (c) gas is compressed by a retailer of motor vehicle fuel on the retailer's property solely
66 for sale as a motor vehicle fuel.
67 (10) "Gas plant" includes all real estate, fixtures, and personal property owned,
68 controlled, operated, or managed in connection with or to facilitate the production, generation,
69 transmission, delivery, or furnishing of gas, natural or manufactured, for light, heat, or power.
70 (11) "Heat corporation" includes every corporation and person, their lessees, trustees,
71 and receivers, owning, controlling, operating, or managing any heating plant for public service
72 within this state.
73 (12) (a) "Heating plant" includes all real estate, fixtures, machinery, appliances, and
74 personal property controlled, operated, or managed in connection with or to facilitate the
75 production, generation, transmission, delivery, or furnishing of artificial heat.
76 (b) "Heating plant" does not include either small power production facilities or
77 cogeneration facilities.
78 (13) "Independent energy producer" means every electrical corporation, person,
79 corporation, or government entity, their lessees, trustees, or receivers, that own, operate,
80 control, or manage a small power production or cogeneration facility.
81 (14) "Private telecommunications system" includes all facilities for the transmission of
82 signs, signals, writing, images, sounds, messages, data, or other information of any nature by
83 wire, radio, lightwaves, or other electromagnetic means, excluding mobile radio facilities, that
84 are owned, controlled, operated, or managed by a corporation or person, including their lessees,
85 trustees, receivers, or trustees appointed by any court, for the use of that corporation or person
86 and not for the shared use with or resale to any other corporation or person on a regular basis.
87 (15) (a) "Public utility" includes every railroad corporation, gas corporation, electrical
88 corporation, distribution electrical cooperative, wholesale electrical cooperative, telephone
89 corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation,

90 and independent energy producer not described in Subsection (15)(d), where the service is
91 performed for, or the commodity delivered to, the public generally, or in the case of a gas
92 corporation or electrical corporation where the gas or electricity is sold or furnished to any
93 member or consumers within the state for domestic, commercial, or industrial use.
94 (b) (i) If any railroad corporation, gas corporation, electrical corporation, telephone
95 corporation, telegraph corporation, water corporation, sewerage corporation, heat corporation,
96 or independent energy producer not described in Subsection (15)(d), performs a service for or
97 delivers a commodity to the public, it is considered to be a public utility, subject to the
98 jurisdiction and regulation of the commission and this title.
99 (ii) If a gas corporation, independent energy producer not described in Subsection
100 (15)(d), or electrical corporation sells or furnishes gas or electricity to any member or
101 consumers within the state, for domestic, commercial, or industrial use, for which any
102 compensation or payment is received, it is considered to be a public utility, subject to the
103 jurisdiction and regulation of the commission and this title.
104 (c) Any corporation or person not engaged in business exclusively as a public utility as
105 defined in this section is governed by this title in respect only to the public utility owned,
106 controlled, operated, or managed by the corporation or person, and not in respect to any other
107 business or pursuit.
108 (d) An independent energy producer is exempt from the jurisdiction and regulations of
109 the commission if it meets the requirements of Subsection (15)(d)(i), (ii), or (iii), or any
110 combination of these:
111 (i) the commodity or service is produced or delivered, or both, by an independent
112 energy producer solely for the uses exempted in Subsection (7) or for the use of state-owned
113 facilities;
114 (ii) the commodity or service is sold by an independent energy producer to an electrical
115 corporation; or
116 (iii) (A) the commodity or service delivered by the independent energy producer is
117 delivered to an entity which controls, is controlled by, or affiliated with the independent energy
118 producer or to a user located on real property managed by the independent energy producer;
119 and
120 (B) the real property on which the service or commodity is used is contiguous to real

121 property which is owned or controlled by the independent energy producer. Parcels of real
122 property separated solely by public roads or easements for public roads shall be considered as
123 contiguous for purposes of this Subsection (15).
124 (e) Any person or corporation defined as an electrical corporation or public utility
125 under this section may continue to serve its existing customers subject to any order or future
126 determination of the commission in reference to the right to serve those customers.
127 (f) (i) "Public utility" does not include any person that is otherwise considered a public
128 utility under this Subsection (15) solely because of that person's ownership of an interest in an
129 electric plant, cogeneration facility, or small power production facility in this state if all of the
130 following conditions are met:
131 (A) the ownership interest in the electric plant, cogeneration facility, or small power
132 production facility is leased to:
133 (I) a public utility, and that lease has been approved by the commission;
134 (II) a person or government entity that is exempt from commission regulation as a
135 public utility; or
136 (III) a combination of Subsections (15)(f)(i)(A)(I) and (II);
137 (B) the lessor of the ownership interest identified in Subsection (15)(f)(i)(A) is:
138 (I) primarily engaged in a business other than the business of a public utility; or
139 (II) a person whose total equity or beneficial ownership is held directly or indirectly by
140 another person engaged in a business other than the business of a public utility; and
141 (C) the rent reserved under the lease does not include any amount based on or
142 determined by revenues or income of the lessee.
143 (ii) Any person that is exempt from classification as a public utility under Subsection
144 (15)(f)(i) shall continue to be so exempt from classification following termination of the
145 lessee's right to possession or use of the electric plant for so long as the former lessor does not
146 operate the electric plant or sell electricity from the electric plant. If the former lessor operates
147 the electric plant or sells electricity, the former lessor shall continue to be so exempt for a
148 period of 90 days following termination, or for a longer period that is ordered by the
149 commission. This period may not exceed one year. A change in rates that would otherwise
150 require commission approval may not be effective during the 90-day or extended period
151 without commission approval.

152 (g) "Public utility" does not include any person that provides financing for, but has no
153 ownership interest in an electric plant, small power production facility, or cogeneration facility.
154 In the event of a foreclosure in which an ownership interest in an electric plant, small power
155 production facility, or cogeneration facility is transferred to a third-party financer of an electric
156 plant, small power production facility, or cogeneration facility, then that third-party financer is
157 exempt from classification as a public utility for 90 days following the foreclosure, or for a
158 longer period that is ordered by the commission. This period may not exceed one year.
159 (h) (i) The distribution or transportation of natural gas for use as a motor vehicle fuel
160 does not cause the distributor or transporter to be a "public utility," unless the commission,
161 after notice and a public hearing, determines by rule that it is in the public interest to regulate
162 the distributers or transporters, but the retail sale alone of compressed natural gas as a motor
163 vehicle fuel may not cause the seller to be a "public utility."
164 (ii) In determining whether it is in the public interest to regulate the distributors or
165 transporters, the commission shall consider, among other things, the impact of the regulation
166 on the availability and price of natural gas for use as a motor fuel.
167 (16) "Purchasing utility" means any electrical corporation that is required to purchase
168 electricity from small power production or cogeneration facilities pursuant to the Public Utility
169 Regulatory Policies Act, 16 U.S.C. Section 824a-3.
170 (17) "Railroad" includes every commercial, interurban, and other railway, other than a
171 street railway, and each branch or extension of a railway, by any power operated, together with
172 all tracks, bridges, trestles, rights-of-way, subways, tunnels, stations, depots, union depots,
173 yards, grounds, terminals, terminal facilities, structures, and equipment, and all other real
174 estate, fixtures, and personal property of every kind used in connection with a railway owned,
175 controlled, operated, or managed for public service in the transportation of persons or property.
176 (18) "Railroad corporation" includes every corporation and person, their lessees,
177 trustees, and receivers, owning, controlling, operating, or managing any railroad for public
178 service within this state.
179 (19) (a) "Sewerage corporation" includes every corporation and person, their lessees,
180 trustees, and receivers, owning, controlling, operating, or managing any sewerage system for
181 public service within this state.
182 (b) "Sewerage corporation" does not include private sewerage companies engaged in

183 disposing of sewage only for their stockholders, or towns, cities, counties, conservancy
184 districts, improvement districts, or other governmental units created or organized under any
185 general or special law of this state.
186 (20) "Small power production facility" means a facility which:
187 (a) produces electric energy solely by the use, as a primary energy source, of biomass,
188 waste, renewable resources, geothermal resources, or any combination of them;
189 (b) has a power production capacity that, together with any other facilities located at
190 the same site, is not greater than 80 megawatts; and
191 (c) is a qualifying small power production facility under federal law.
192 (21) "Telegraph corporation" includes every corporation and person, their lessees,
193 trustees, and receivers, owning, controlling, operating, or managing any telegraph line for
194 public service within this state.
195 (22) "Telegraph line" includes all conduits, ducts, poles, wires, cables, instruments, and
196 appliances, and all other real estate, fixtures, and personal property owned, controlled,
197 operated, or managed in connection with or to facilitate communication by telegraph, whether
198 that communication be had with or without the use of transmission wires.
199 (23) (a) "Telephone corporation" means any corporation or person, and their lessees,
200 trustee, receivers, or trustees appointed by any court, who owns, controls, operates, manages, or
201 resells a public telecommunications service as defined in Section 54-8b-2 .
202 (b) Only to the extent allowed by 47 U.S.C. Section 332, "telephone corporation"
203 includes a corporation, partnership, or firm that:
204 (i) provides intrastate telephone service offered by a provider of:
205 (A) cellular service;
206 (B) personal communications systems; or
207 (C) other commercial radio service as defined in 47 U.S.C. Section 332; and
208 (ii) has been issued a covering license by the Federal Communications Commission.
209 [(b)] (c) "Telephone corporation" does not mean a corporation, partnership, or firm
210 providing:
211 [(i) intrastate telephone service offered by a provider of cellular, personal
212 communication systems (PCS), or other commercial mobile radio service as defined in 47
213 U.S.C. Sec. 332 that has been issued a covering license by the Federal Communications

214 Commission;]
215 [(ii)] (i) Internet service; or
216 [(iii)] (ii) resold intrastate toll service.
217 (24) "Telephone line" includes all conduits, ducts, poles, wires, cables, instruments,
218 and appliances, and all other real estate, fixtures, and personal property owned, controlled,
219 operated, or managed in connection with or to facilitate communication by telephone whether
220 that communication is had with or without the use of transmission wires.
221 (25) "Transportation of persons" includes every service in connection with or
222 incidental to the safety, comfort, or convenience of the person transported, and the receipt,
223 carriage, and delivery of that person and that person's baggage.
224 (26) "Transportation of property" includes every service in connection with or
225 incidental to the transportation of property, including in particular its receipt, delivery,
226 elevation, transfer, switching, carriage, ventilation, refrigeration, icing, dunnage, storage, and
227 hauling, and the transmission of credit by express companies.
228 (27) "Water corporation" includes every corporation and person, their lessees, trustees,
229 and receivers, owning, controlling, operating, or managing any water system for public service
230 within this state. It does not include private irrigation companies engaged in distributing water
231 only to their stockholders, or towns, cities, counties, water conservancy districts, improvement
232 districts, or other governmental units created or organized under any general or special law of
233 this state.
234 (28) (a) "Water system" includes all reservoirs, tunnels, shafts, dams, dikes, headgates,
235 pipes, flumes, canals, structures, and appliances, and all other real estate, fixtures, and personal
236 property owned, controlled, operated, or managed in connection with or to facilitate the
237 diversion, development, storage, supply, distribution, sale, furnishing, carriage, appointment,
238 apportionment, or measurement of water for power, fire protection, irrigation, reclamation, or
239 manufacturing, or for municipal, domestic, or other beneficial use.
240 (b) "Water system" does not include private irrigation companies engaged in
241 distributing water only to their stockholders.
242 (29) "Wholesale electrical cooperative" includes every electrical corporation that is:
243 (a) in the business of the wholesale distribution of electricity it has purchased or
244 generated to its members and the public; and

245 (b) required to distribute or allocate savings in excess of additions to reserves and
246 surplus to members or patrons on the basis of patronage.




Legislative Review Note
as of 2-14-03 4:17 PM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel